Midwesterners Express Lack of Confidence in Retirement

June 3, 2010 (PLANSPONSOR.com) – A new survey finds that although they expect both personal and business economic conditions to improve in the near term, Midwesterners still have real concerns about the future.

Only 30% of Midwestern respondents to a nationwide survey by Citi report that they are confident in their ability to retire in financial security as planned. Thirty-five percent in the Midwest are not confident in their ability to retire in financial security, and 29% say they are confident but would need to make changes to their plans.   

Among those ages 18 to 39, 45% lack confidence in their ability to retire in financial security, compared to 31% of Midwesterners age 40 and older.   

When it comes to investing money, Midwestern investors are more willing to take a chance on a high-return investment than their national counterparts – even though they remain less optimistic than investors nationwide about the current and future investment climate, according to a press release. Thirteen percent of Midwestern investors would rate their investment strategy as an eight or higher on a 10-point risk scale, with 10 being the highest risk available, compared with 8% of all investors nationally.   

Midwestern investors are more likely to believe it’s a good time to invest in mutual funds (45%) and individual stocks (42%) than the national average of investors (40% and 37%, respectively). More Midwestern investors describe their investment strategy as focused on maintaining wealth (55%) than on trying to build wealth (44%), reflecting the national trend, the press release said.   

Fewer Midwesterners (28%) than the national average (32%) report that they have taken money out of savings to pay expenses. When asked what they would do if they were to receive extra money, 37% of Midwesterners would save the extra money and 30% would pay overdue bills. Only 20% of Midwestern respondents would invest the money, and 11% would spend it.   

The survey found younger people in the Midwest are focusing their finances on saving and investing and are more likely than older generations to report that they are reducing the amount of money that they owe. Fifty-five percent of young adults surveyed said they are saving and investing more today than previously, compared to 34% of Midwesterners age 40 and over, and 79% of young adults say they are actively working to reduce their debt, compared to 62% of Midwesterners age 40 and over.   

Hart Research Associates conducted the telephone survey of 2,002 adults nationally from March 15-25, 2010. The survey included 467 respondents from the Midwest.